The overseas, controlling owners of an Australian company may want to apply to change the 30 June balance date for the Australian company to line up with the home country balance date. For example, the Australian subsidiary of a UK parent company could apply to change the balance date to 31 March to assist with UK reporting requirements.
There is a Tax Office form called Application for Substituted Accounting Period (SAP) NAT5087.
Also, the Tax Office has published a practice statement for its staff to follow in assessing an application: PSLA 2007/21 Substitute Accounting Periods (SAPs).
The application should be made for the current or a future tax year on a prospective basis and the Tax Office may not consider a retrospective request due to complications with PAYG instalments etc.
If the new balance date falls after 30 November, a transitionary tax return must be lodged for the “short” tax period from 1 July to the new balance date and then move to full 12 month tax year lodgements based on the new balance date.
If the new balance date is 30 November or earlier and you have your application approved before the preceding 30 June, the tax return period may be extended for a few months.
There must be sufficient reasons for the Tax Office to approve the application for the substituted accounting period. You will need to disclose the parent company, percentage of ownership of the Australian subsidiary and the country of residence of the parent company.
Andrew and Tony Lovett
30 June 2015
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